The generic term, “smart card,” generally denotes an integrated circuit (IC) card, that is, a credit-card-size piece of plastic with an embedded microchip. The IC chip on a smart card generally, but not necessarily, consists of a microprocessor (the CPU), read-only memory (ROM), random access memory (RAM), an input/output unit, and some persistent memory such as electrically erasable programmable read-only memory (EEPROM). The chip can perform arithmetic computations, logic processing, data management, and data communication.
Smart cards are mainly of two types: contact and contact-less. The International Standard Organization (ISO) has established specifications for such electronic cards under the ISO series. In particular, ISO 7816 applies to integrated circuit(s) cards. Because of its computing capability, a smart card can support a multitude of security features such as authentication, secured read/write, symmetric key and asymmetric key encryption/decryption. These smart card security features make it well suited for electronic commerce where data security and authenticity are of primary importance.
Smart card use has found application in many specialized fields such as mass transportation, health insurance, parking, campus, gas, etc. And its potential use in electronic commerce and other financial areas are gaining popularity at a rapid pace. U.S. Pat. No. 5,521,362, issued to Robert S. Power on May 28, 1996, entitled “Electronic purse card having multiple storage memories to prevent fraudulent usage and method therefore,” describes an electronic purse application. Power's invention demonstrates a smart card's capability to be used as a secure financial instrument and not just as a storage device.
As advances in technology push smart-card chip computing to higher speeds and larger memory capacity, the concept of a “multi-application” smart card is increasingly becoming economically and physically feasible. U.S. Pat. No. 5,530,232 issued to Douglas C. Taylor on Jun. 25, 1996, entitled “Multi-application data card,” describes a multi-application card, which is capable of substituting for a plurality of existing single-application cards and satisfying both financial and non-financial requirements. The multi-application card uses a conventional data link to connect between the smart card and the remote service provider. Taylor's invention, the multi-application card, does not relate to any kind of open network or cryptographic method.
U.S. Pat. No. 5,544,246 issued to Mandelhaum et al. on” on Aug. 5, 1996, entitled “Smart card adapted for a plurality of service providers and for remote installation of same,” describes a smart card, which allows different service providers to coexist on the same smart card. Each service provider is considered a user of the smart card and is installed on the card by the issuer/owner of the smart card. Each user is allowed to build a tree-like file structure and protect it with a password file. Mandelbaum's invention depicts a smart card allows for the creation and deletion of multiple applications. Mandelbaum's smart card controls the access to each application by using an appropriate password file.
U.S. Pat. No. 5,671,279 issued to Taher Elgamal on Sep. 23, 1997, entitled “Electronic commerce using a secure courier system,” describes a system for implementing electronic commerce over a public network using public/private key cryptography. The Elgamal patent did not mention the use of a smart card as a tool in conducting the electronic commerce and the participants were authenticated through the use of digital certificates. The secure courier system requires a secured channel such as a Secure Socket Layer (SSL) between the trading parties over an open network such as the Internet.
U.S. Pat. No. 5,790,677, issued to Fox et al. on Aug. 4, 1998, entitled “System and method for secure electronic commerce transactions,” describes a system and method having a registration process followed by a transaction process. During the registration phase, each participant of a transaction registers with a trusted credential-binding server by sending to the server a registration packet. The server produces unique credentials based upon the request received and sends them to the request originator. During the transaction phase, the originator of the transaction requests, receives and verifies the credentials of all intended recipients of the commerce document and/or instrument and encrypts the document and/or instrument using the public key of the individual recipient. Thus, each receiving party can decrypt and access the information intended only for him. Fox's patent describes a process which reflects the theme of the so called “Secure Electronic Transaction” (SET) standard which is an ongoing effort supported by several major financial and software companies to establish a digital certificate and certificate authority based electronic commerce system.
U.S. Pat. No. 5,796,840 issued to Derek L. Davis on Aug. 18, 1998, entitled “Apparatus and method for providing secured communication,” describes a semiconductor device, which is capable of generating device-specific key pairs to be used in subsequent message authentication and data communication. The semiconductor device uses public/private key cryptography to ensure the authenticity of two communicating parties.
U.S. Pat. No. 5,534,857 issued to Simon G. Laing and Matthew P. Bowcock on Jul. 9, 1996, entitled “Method and System for Secure, Decentralized Personalization of Smart Cards,” describes a method and apparatus for securely writing confidential data from an issuer to a customer smart card at a remote location. A mutual session key for enciphering data transfer between a secure terminal and a secure computer is generated by using a common key stored in the secure computer and a retailer smart card.
It is clear from the inventions mentioned above that the architecture of a secure electronic commerce system involves a public key infrastructure and digital certificate authority associated with it.
On an open network, a secret key-based system is less flexible in terms of key distribution and key management, and is more subject to malicious attack. On the other hand, a public/private key-based system, with all its advantages over the secret key system, has its own daunting task of authenticating transaction parties to one another. The current invention presents another system and method, which replaces the need for certificate authorities and digital certificates. The current invention is a hybrid system for electronic transactions. The hybrid system uses public/private keys during the key exchange phase and uses a session key as a secret key during the transaction phase.